New Partnerships: Finding the right person to lead your company

Businesses benefit from the potential diversity of knowledge, experience and resources that multiple owners bring to an enterprise.

However, in accessing these resources, companies need to develop an organizational structure that assigns areas of responsibility according to each partners or employees strengths, expertise and commitment to the company’s goals.

Each partner needs to know what their associates bring to the venture and collectively the team needs to decide how to best use those resources. This type of predefined structure makes a company flexible, focused and stable.

Leadership

Most ventures start with a limited amount of capital and manpower, which means owners need to take responsibility for aspects of the business they are not competent or interested in overseeing.

For some people, it becomes an all or nothing proposal. Consequently, they refuse to entrust somebody else with any responsibilities, because of their compulsion to retain control or because of pride.

The business becomes an extension of their personality and self-image. They refuse to accept advice in their personal life and by extension are unlikely to accept it on behalf of the business.

Partners need to be aware of these traits, and act accordingly. They need to accept this management scenario, find a tolerable compromise or walk away.

The only reason to go into a partnership is so that the owners can share resources. Either there has to be an inherent trust between the partners, or a strong commitment to learn to trust their associates.

In 1976, engineer Steve Wozniak and Steve Jobs collaborated to start a company to market the Apple I personal computer.

Even though, Wozniak was the genius behind the Apple I, he agreed to a 50/50 partnership. Wozniak always saw himself as an engineer and had no interest in company management. Although, Jobs was 5 years his junior, Wozniak had no issue in giving Jobs control of the company. More importantly, Wozniak entrusted Jobs with the future of his inventions.

Philosophy, Ethics and Goals

There needs to be an alignment of philosophy, ethics and goals, between a president or CEO and the rest of the company.

These elements keep companies focused and allow them to staff the company with people who are willing to buy into the culture.

These elements, are as representative of the company as the products they sell.

Starbucks sells coffee, but CEO Howard Shultz has pledge the company to progressive social commitments. These commitments include health insurance for every employee and purchasing fair trade coffee beans. This commitment reduces profits, but adds value to the company in other ways.

Whether a leader bestows these commitments on the company, or vice versa, the entire company needs to align themselves with this vision. Otherwise, fissures develop and philosophical disagreements between the associates retard the company’s growth.

Partners should have a firm agreement on the following issues.

•         Growth Expectations       
•         Potential returns
•         General strategy for the next 5 years
•         Mission Statements
•         Ethics
•         Philosophy and employee relations
•         Employee ownership and stock options

Without an agreement, a leader will be unable or unwilling to implement the wishes of the owners.

Nothing is written in stone

A company should never be beholden to its leader. The collective nature of any company dictates that the needs of the many should outweigh the needs of the few.

There are many examples in business history where presidents and CEO’s have manipulated the board of directors to secure their power. Consequently, these power grabs instil a culture of discontent, destabilizes the company, and smothers innovation.

Businesses and markets evolve quickly. Growing businesses can outgrow the skills, knowledge and even the passion of its leadership.

Google is a good example of this type of leadership change. In 1998, Google started as a search engine, and in a short amount of time grew into an internet-advertising leader.

In response to this rapid growth, they hired Eric Schmidt to manage the company. His experience as a veteran executive in the technology sector made him better suited to lead the company than its original founders.

Sergey Brin and Larry Page continued to assist in the management of the company, and their continued involvement allowed them to mature as Silicon Valley business leaders.

In 2011, in an amicable transition, Page became CEO of Google.

The transition allows Google to implement significant structural and strategic changes, which will allow it to be more competitive against social media giants Facebook and Twitter.

It is expected that Page will bring the company back to its start-up roots, reduce bureaucracy, and make it more nimble and proactive.

A new company needs to take an inventory of their talent base and decide how these people can best serve the company.

In assigning positions and responsibilities, owners need to consider someone’s merits, experience, knowledge and most importantly their commitment to the company’s core beliefs.

In this, associates need to make sure executives and managers remain faithful to the desires of the partnership and sacrifice personal interests, for the good of the company.